Feasibility 125o33

Feasibility Analysis and the System Proposal Objectives

• Identify feasibility checkpoints in the systems life cycle. • Identify alternative system solutions. • Define and describe six types of feasibility and their respective criteria. • Perform various cost-benefit analyses using time-adjusted costs and benefits. • Write suitable system proposal reports for different audiences. • Plan for a formal presentation to system owners and s. 11-1

Feasibility Analysis Feasibility – the measure of how beneficial or practical an information system will be to an organization. Feasibility analysis – the process by which feasibility is measured. Creeping Commitment – an approach to feasibility that proposes that feasibility should be measured throughout the life cycle. 11-2

Feasibility Checkpoints During Systems Analysis

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Six Tests For Feasibility

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Operational feasibility – a measure of how well a solution meets the system requirements. Cultural (or political) feasibility - a measure of how well a solution will be accepted in an organizational climate. Technical feasibility – a measure of the practicality of a technical solution and the availability of technical resources and expertise. Schedule feasibility – a measure of how reasonable the project timetable is. Economic feasibility - a measure of the costeffectiveness of a project or solution. Legal feasibility - a measure of how well a solution can be implemented within existing legal/contractual obligations.

Operational Feasibility • How well proposed system solves the problems and takes advantage of opportunities identified during the scope definition and problem analysis phases • How well proposed system satisfies system requirements identified in the requirements analysis phase • Is the problem still worth solving? 11-5

Cultural (or political) feasibility • Does management the system? • How do end s feel about their role in the system? • What end s may resist or not use the system? How can this be overcome? • How will the working environment change? Can s and management adapt to the change? 11-6

Technical feasibility • Is the proposed technology or solution practical? • Do we currently possess the necessary technology? • Do we possess the necessary technical expertise?

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Schedule feasibility • Are specified deadlines mandatory or desirable? • Are mandatory deadlines realistic for proposed solution?

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Economic feasibility • During Scope Definition • Do the problems or opportunities warrant the cost of a detailed study and analysis of the current system?

• During Problem Analysis • After a detailed study of the current system • Better estimates of development costs and benefits

• During Decision Analysis • Requirements now defined • Development costs can be better estimated 11-9

Legal feasibility • • • • •

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Copyrights Union contracts Legal requirements for financial reporting Antitrust laws National data and work laws

Information System Costs • Development costs - one time costs that will not recur after the project has been completed. • • • • •

Personnel Computer usage Training Supply, duplication, and equipment Computer equipment and software

• Operating costs - costs that recur throughout the lifetime of the system.

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• Fixed costs — occur at regular intervals but at relatively fixed rates. • Variable costs — occur in proportion to usage.

Information System Benefits • Tangible benefits are those that can be easily quantified. • Intangible benefits are those benefits believed to be difficult or impossible to quantify. • Fewer processing errors • Increased throughput • Decreased response time • Elimination of job steps • Increased sales • Reduced credit losses • Reduced expenses 11-12

Costs for a Proposed Solution

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Three Popular Techniques to Assess Economic Feasibility • Payback Analysis • Return On Investment • Net Present Value

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Time Value of Money • Used with all three cost-effectiveness techniques. • Concept that recognizes that a dollar today is worth more than a dollar one year from now. • Invest $100 at 2% for one year yields $102. • So $100 today and $102 one year from today represent the same value. • Given $20,000 benefit from information system two years from now and 10% return from other investments, means that benefit is worth $16,528 today. 11-15

Payback Analysis Payback analysis – a technique for determining if and when an investment will pay for itself. Payback period – the period of time that will lapse before accrued benefits overtake accrued and continuing costs.

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Present Value Formula Present value – the current value of a dollar at any time in the future. PVn = 1/(1 + i)n Where n is the number of years and i is discount rate

Discount rate – a percentage similar to interest rates that you earn on your savings.

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• In most cases the discount rate for a business is the opportunity cost of being able to invest money in other projects or investments

Payback Analysis for a Project

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Return-on-Investment Analysis (ROI) Return-on-Investment (ROA) analysis – a technique that compares the lifetime profitability of alternative solutions. The ROI for a solution or project is a percentage rate that measures the relationship between the amount the business gets back from an investment and the amount invested.

Lifetime ROI = (estimated lifetime benefits – estimated lifetime costs) / estimated lifetime costs Annual ROI = lifetime ROI / lifetime of the system 11-19

Net Present Value (NPV) Analysis Net present value – analysis technique that compares annual discounted costs and benefits of alternative solutions.

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Candidate Systems Matrix Candidate 1 Name

Candidate 2 Name

Candidate 3 Name

Stakeholders Knowledge Processes

Communications

Candidate Systems Matrix – a tool used to document similarities and differences between candidate systems.

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• Stakeholders - how system will interact with people and other systems. • Knowledge - how data will be implemented, how inputs will be captured, how outputs will be generated. • Processes - how processes will be built and implemented. • Communications - how processes and data will be distributed.

Sample Candidate Systems Matrix Characteristics Portion of System Computerized Brief description of that portion of the system that would be computerized in this candidate.

Benefits Brief description of the business benefits that would be realized for this candidate.

Servers and Workstations A description of the servers and workstations needed to this candidate.

Candidate 1

emulators, operating systems, languages, etc.). Not generally applicable if applications 11-22 software packages are to be purchased.

Candidate 3

COTS package Platinum Plus from Entertainment Software Solutions would be purchased and customized to satisfy Member Services required functionality.

Member Services and warehouse operations in relation to order fulfillment.

Same as candidate 2.

This solution can be implemented quickly because it’s a purchased solution.

Fully s required business processes for SoundStage Inc. Plus more efficient interaction with member s.

Same as candidate 2.

Technically architecture dictates Pentium III, MS Windows 2000 class servers and workstations (clients).

Same as candidate 1.

Same as candidate 1.

MS Visual Basic 5.0 System Architect 2001 Internet Explorer

MS Visual Basic 5.0 System Architect 2001 Internet Explorer

MS Visual C++ and MS Software tools needed to design Access for customization of and build the candidate (e.g., package to provide report database management system, writing and integration. Software Tools Needed

Candidate 2

Sample Candidate Systems Matrix (cont.) Characteristics

Application Software

Candidate 1

Candidate 2

Candidate 3

Package solution

Custom Solution

Same as candidate 2.

Client/Server

Same as candidate 1.

Same as candidate 1.

(2) HP4MV department laser printers (2) HP5SI LAN laser printers

(2) HP4MV department laser printers. (2) HP5SI LAN laser printers (1) PRINTRONIX bar-code printer (includes software & drivers)

Same as candidate 2.

A description of the software to be purchased, built, accessed, or some combination of these techniques.

Method of Data Processing Generally some combination of: on-line, batch, deferred batch, remote batch, and real-time.

Output Devices and Implications A description of output devices that would be used, special output requirements, (e.g., network, preprinted forms, etc.), and output considerations (e.g., timing constratints) 11-23

Web pages must be designed to VGA resolution. All internal screens will be designed for SVGA resolution.

Sample Candidate Systems Matrix (cont.) Characteristics Input devices and Implications

Candidate 1

Brief description of what data would be stored, what data would be accessed from existing stores, what storage media would be used, how much storage capacity would be needed, and how data would be organized. 11-24

Candidate 3

Keyboard & mouse.

Apple “Quick Take” digital camera and software (15) PSC Quickscan laser bar-code scanners (1) HP Scanjet 4C Flatbed Scanner Keyboard and mouse

Same as candidate 2.

MS SQL Server DBMS with 1000GB arrayed capability.

Same as candidate 1.

Same as candidate 1.

A description of input methods to be used, input devices (e.g., keyboard, mouse, etc.), special input requirements (e.g., new or revised forms from which data would be input), and input considerations (e.g., timing of actual inputs).

Storage Devices and Implications

Candidate 2

Feasibility Analysis Matrix Feasibility Analysis Matrix – a tool used to rank candidate systems. Weighting

Description Operational Feasibility Cultural Feasibility

Technical Feasibility Schedule Feasibility Economic Feasibility Legal Feasibility Ranking 11-25

Candidate 1

Candidate 2

Candidate 3

Sample Feasibility Analysis Matrix Wt Description

Operational feasibility

15%

Candidate 1

Candidate 2

Candidate 3

Purchase commercial offthe-shelf package for member services.

Write new application inhouse using new company standard VB.NET and SQL Server database

Rewrite current in-house application using Powerbuilder.

s only Member Services requirements. Current business process would have to be modified to take advantage of software functionality. Also there is concern about security in the system.

Fully s -required functionality.

Fully s -required functionality.

Score: 100

Score: 100

Score: 60 Cultural Feasibility

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15%

Possible resistance to non-standard interface of proposed purchased package. Score: 70

No foreseeable problems. Score: 100

No foreseeable problems. Score: 100

Sample Feasibility Analysis Matrix (cont.) Technical feasibility

Wt

Candidate 1

Candidate 2

Candidate 3

20%

Current production release of Platinum Plus package is version 1.0 and has been on the market for only 6 weeks. Maturity of product is a risk, and company charges and additional monthly fee for technical .

Solution requires writing application in VB .NET. Although current technical staff has only Powerbuilder experience, it should be relatively easy to find programmers with VB .NET experience.

Although current technical staff is comfortable with Powerbuilder, management is concerned about acquisition of Powerbuilder by Sybase Inc. MS SQL Server is the current company standard for database, which competes with Sybase DBMS. We have no guarantee that future versions of Powerbuilder will "play well" with our current version of SQL Server.

Score: 95 Required to hire or train Java J2EE expertise to perform modifications for integration requirements.

Score: 60 Score: 50 11-27

Sample Feasibility Analysis Matrix (cont.) Wt Economic feasibility

Candidate 1

Candidate 2

Candidate 3

30%

Cost to develop: Payback (discounted): Net present value:

Approx. $350.000

Approx. $418.000

Approx. $400.000

Approx. 4.5 years

Approx. 3.5 years

Approx. 3.3 years

Approx. $210,000

Approx. $307,000

Approx. $325,000

See Attachment A

See Attachment A

See Attachment A

Detailed calculations:

Score: 60

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Score: 85

Score: 90

Sample Feasibility Analysis Matrix (cont.) Wt Schedule feasibility

10%

Candidate 1 Less than 3 months Score: 95

Legal feasibility

Weighted score

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10%

100%

No foreseeable problems

Candidate 2 9-12 months Score: 80 No foreseeable problems

Candidate 3 9 months Score: 85 No foreseeable problems

Score: 100

Score: 100

Score: 100

67

92.5

87.5

The System Proposal System proposal – a report or presentation of a recommended solution. • Usually formal written report or oral presentation • Intended for system owners and s

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Length of the Written Report • To Executive-level managers - one or two pages • To Middle-level managers - three to five pages • To Supervisory-level managers - less than 10 pages • To clerk-level personnel - less than 50 pages. 11-31

Formats for Written Reports • factual format - traditional and best suited to readers interested in facts and details as well as conclusions. • istrative format - modern, result-oriented format preferred by managers and executives. Factual Format

istrative Format

I. Introduction II. Methods and procedures

I. Introduction II. Conclusions and recommendations

III. Facts and details

III. Summary and discussion of facts and details

IV. Discussion and analysis of facts and details V. Recommendations VI. Conclusion

IV. Methods and procedures

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V. Final conclusion VI. Appendixes with facts and details

Organization of the Written Report • Primary elements present the actual information that the report is intended to convey. • Secondary elements package the report so the reader can easily identify the report and its primary elements.

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Secondary Elements for a Written Report Letter of transmittal Title page Table of contents List of figures, illustrations, and tables Abstract or executive summary (The primary elements--the body of the report, in either the factual or istrative format--are presented in this portion of the report.) Appendices 11-34

Writing the Report • Paragraphs should convey a single idea. • Sentences should not be too complex. • Write in active voice. • Eliminate jargon, big words, and deadwood. 11-35

System Proposal – formal presentations Formal presentation – a special meeting used to sell new ideas and gain approval for new systems. They may also be used for any of these purposes: • • • • • • • 11-36

Sell new system Sell new ideas Head off criticism Address concerns conclusions Clarify facts Report progress

Typical Outline and Time Allocation for an Oral Presentation I. Introduction (one-sixth of total time available) A. Problem statement B. Work completed to date II. Part of the presentation (two-thirds of total time available) A. Summary of existing problems and limitations

B. Summary description of the proposed system C. Feasibility analysis D. Proposed schedule to complete project III. Questions and concerns from the audience (time here is not to be included in the time allotted for presentation and conclusion; it is determined by those asking the questions and voicing their concerns) IV. Conclusion (one-sixth of total time available) A. Summary of proposal 11-37

B. Call to action (request for whatever authority you require to continue systems development)

Guidelines for Visual Aids

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Source: Copyright Keith London

Conducting the Formal Presentation • Dress professionally. • Avoid using the "I" word when making the presentation. • Maintain eye with the group and keep an air of confidence. • Be aware of your own mannerisms.

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When Answering Questions • Always answer a question seriously, even if you think it is a silly question. • Answer both the individual who asked the question and the entire audience. • Summarize your answers. • Limit the amount of time you spend answering any one question. • Be honest. 11-40